CenturyLink Downplays Level 3 Competition in Merger Pursuit

CenturyLink Level 3 logo

CenturyLink and Level 3 Communications, which are merging, do not significantly compete with each other in the business services market where they offer overlapping services.

That’s according to CenturyLink’s latest filing with the Federal Communications Commission in response to regulatory questions. The merger is anticipated to be complete by Sept. 30.

The two companies participate in a “highly competitive” market for business data services (BDS) and other enterprise services, according to CenturyLink.

“In recent years, this market has seen dramatic change, becoming increasingly competitive for companies such as CenturyLink due in large part to the rapid expansion of cable companies into a broad range of business services,” it said. “Indeed, the culmination of the cable companies’ decade-long extension of fiber deep into their networks and the maturation of their business services support systems now stands as the most significant competitive factor in the business data services market. Competition for business customers also has increased due to the expansion of large national providers, such as AT&T and Verizon, and (CLECs), such as Zayo.”{ad}

Within this evolving market, CenturyLink and Level 3 are “just two of a large group of competitors,” according to the filing. In the fourth quarter of 2016, CenturyLink accounted for 28.5 percent of sales of SMB data services in its ILEC territory, while Level 3 accounted for 1.1 percent.

“As a general matter, CenturyLink routinely competes against all major cable companies – including Comcast, Cox and Charter – as well as non-cable CLECs – including Level 3, Integra, Windstream and Birch – in the provision of business data services and other communications services marketed to SMBs and enterprises,” it said. “Firms to which CenturyLink regularly lose business include nationwide telecommunications firms, such as AT&T and Verizon; facilities-based CLECs, such as Zayo; regional telecommunications firms, such as Arvig, Consolidated and Great Plains Communications; aggregators, such as IBM and Accenture; and even smaller firms, such as Wisconsin Independent Network. Verizon’s acquisition of XO increased Verizon’s already substantial fiber capacity and facilities in CenturyLink’s territory, creating an even stronger competitor to CenturyLink. Zayo’s added capacity over the last decade has resulted in an extensive fiber footprint throughout CenturyLink’s ILEC territory.”

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